News

July 24, 2010

That Was The Week That Was ... In Australia

By Our Man in Oz

Minews. Good morning Australia. How is your election campaign affecting the market?

Oz. Not badly is the answer, not that politicians can take any credit. Last week’s better-than-expected 3.5 per cent rise in the metals and mining index was all about China, again. Strong demand for coal, iron ore, and base metals has pushed national export income back to record levels. Exports in the June quarter surged upward by 16 per cent, the highest quarterly rise ever, with China now accounting for 23 per cent of Australia’s exports and 17 per cent of imports. One possible dampener on that apparent good news is that the Reserve Bank has its finger poised over the interest-rate button and, election or not, the bank’s Governor, Glenn Stevens, says he will jack rates higher for theseventh time since last October if he gets a whiff of inflation.

Minews. Are you prepared to tip an election winner yet?

Oz. All of the informed money is going on the return of Labor, supported by Green preference votes, which are very important under our electoral system. The Prime Minister, Julia Gillard, is making all the right moves to rid the government of the dowdy legacy left by the dumped Kevin Rudd, and she’s even making an effort to soften her appalling Aussie accent. Some miners harbour reservations about her true intentions, and there were some...